I 

112TH CONGRESS 

1ST SESSION H. R. 1631 

To amend the Internal Revenue Code of 1986 to provide for adjustments 

in the individual income tax rates to reflect regional differences in the 

cost-of-living. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 15, 2011 

Mr. NADLER (for himself, Mrs. LOWEY, and Mr. ISRAEL) introduced the 

following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

for adjustments in the individual income tax rates to 

reflect regional differences in the cost-of-living. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Tax Equity Act of 

5 2011’’. 


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1 SEC. 2. REGIONAL COST-OF-LIVING ADJUSTMENTS IN INDI2 VIDUAL INCOME TAX RATES. 

3 (a) GENERAL RULE.—Subsection (f) of section 1 of 

4 the Internal Revenue Code of 1986 is amended by adding 

5 at the end thereof the following new paragraphs: 

6 ‘‘(9) REGIONAL COST-OF-LIVING ADJUST7 MENTS.— 

8 ‘‘(A) IN GENERAL.—In the case of an indi9 vidual, the rate table otherwise in effect under 

10 this section for any taxable year (determined 

11 after the application of paragraph (1)) shall be 

12 further adjusted as provided in subparagraph 

13 (B). 

14 ‘‘(B) METHOD OF MAKING REGIONAL AD15 JUSTMENT.—The rate table otherwise in effect 

16 under this section with respect to any individual 

17 for any taxable year shall be adjusted as fol18 lows: 

19 ‘‘(i) The minimum and maximum dol20 lar amounts otherwise in effect for each 

21 rate bracket shall be multiplied by the ap22 plicable multiplier (for the calendar year in 

23 which the taxable year begins) which ap24 plies to the statistical area in which the in25 dividual’s primary place of abode during 

26 the taxable year is located. 


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1 ‘‘(ii) The rate applicable to any rate 

2 bracket (as adjusted by clause (i)) shall 

3 not be changed. 

4 ‘‘(iii) The amount setting forth the 

5 tax shall be adjusted to the extent nec6 essary to reflect the adjustments in the 

7 rate brackets. 

8 If any amount determined under clause (i) is 

9 not a multiple of $50, such amount shall be 

10 rounded to the nearest multiple of $50. 

11 ‘‘(10) DETERMINATION OF MULTIPLIERS.— 

12 ‘‘(A) IN GENERAL.—Not later than De13 cember 15 of each calendar year, the Secretary 

14 shall prescribe an applicable multiplier for each 

15 statistical area of the United States which shall 

16 apply to taxable years beginning during the suc17 ceeding calendar year. 

18 ‘‘(B) DETERMINATION OF MULTIPLIERS.— 

19 ‘‘(i) For each statistical area where 

20 the cost-of-living differential for any cal21 endar year is greater than 125 percent, the 

22 applicable multiplier for such calendar year 

23 is 90 percent of such differential. 

24 ‘‘(ii) For each statistical area where 

25 the cost-of-living differential for any calVerDate Mar 15 2010 00:32 Apr 21, 2011 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1631.IH H1631

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1 endar year exceeds 97 percent but does not 

2 exceed 125 percent, the applicable multi3 plier for such calendar year is 1.05. 

4 ‘‘(iii) For each statistical area not de5 scribed in clause (i) or (ii), the applicable 

6 multiplier is the cost-of-living differential 

7 for the calendar year. 

8 ‘‘(C) COST-OF-LIVING DIFFERENTIAL.— 

9 The cost-of-living differential for any statistical 

10 area for any calendar year is the percentage de11 termined by dividing— 

12 ‘‘(i) the cost-of-living for such area for 

13 the preceding calendar year; by 

14 ‘‘(ii) the average cost-of-living for the 

15 United States for the preceding calendar 

16 year. 

17 ‘‘(D) COST-OF-LIVING FOR AREA.— 

18 ‘‘(i) IN GENERAL.—For calendar year 

19 2010 and each calendar year thereafter, 

20 the Secretary of Labor shall determine and 

21 publish a cost-of-living index for each sta22 tistical area. 

23 ‘‘(ii) METHODOLOGY.—The cost-of-liv24 ing index determined under clause (i) for 

25 any statistical area for any calendar year 


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1 shall be based on average market prices for 

2 the area for the 12-month period ending 

3 on August 31 of such calendar year. The 

4 market prices taken into account under the 

5 preceding sentence shall be selected and 

6 used under the same methodology as is 

7 used by the Secretary of Labor in devel8 oping the Consumer Price Index for All 

9 Urban Consumers. 

10 ‘‘(E) STATISTICAL AREA.—For purposes of 

11 this subsection the term ‘statistical area’ 

12 means— 

13 ‘‘(i) any metropolitan statistical area 

14 as defined by the Secretary of Commerce, 

15 and 

16 ‘‘(ii) the portion of any State not 

17 within a metropolitan statistical area as so 

18 defined. 

19 ‘‘(11) AREAS OUTSIDE THE UNITED STATES.— 

20 The area applicable multiplier for any area outside 

21 the United States shall be 1.’’ 

22 (b) EFFECTIVE DATE.— 

23 (1) IN GENERAL.—The amendment made by 

24 this section shall apply to taxable years beginning 

25 after December 31, 2011. 


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1 (2) TRANSITION RULE.—Notwithstanding sec2 tion 1(f)(9)(A) of the Internal Revenue Code (as 

3 added by this section), the date for prescribing ap4 plicable multipliers for taxable years beginning in 

5 calendar year 2012 shall be the date 1 year after the 

6 date of the enactment of this Act. 

Æ 


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